MONTGOMERY, Ala. (AP) – The Alabama Senate has voted in favor of legislation which would extend payday loan repayment periods to six months.
Senators voted 28-1 on Tuesday to send the bill to the House.
Payday borrowers in Alabama currently face large fees for renewing loans they are unable to repay within a few weeks. In addition to extending repayment periods, the bill would require that lenders accept installment payments.
Republican Sen. Arthur Orr, the bill’s sponsor, says the legislation would “decrease the punitive nature” of Alabama’s payday lending operations.
Colorado lawmakers implemented similar legislation in 2010. A study by the Pew Charitable Trusts found that the number of payday stores in Colorado shrunk by half after the change.